Accord and Satisfaction

THE AFFIRMATIVE DEFENSE OF ACCORD AND SATISFACTION: What is accord and satisfaction as a legal concept? Under Texas common law, the affirmative defense of accord and satisfaction is based on an express or implied contract under which the parties agree to discharge an existing obligation by means of a lesser payment that is tendered and accepted. Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 863 (Tex. 2000). What does it take to successfuly assert this defense? To prevail on this defense, [ Defendant ] had to produce evidence establishing (1) a dispute between the parties, and (2) that the parties specifically and intentionally agreed to discharge [ the Defendant's ] prior obligations. See id. An alleged agreement is sufficiently definite if a court is able to determine the respective legal obligations of the parties thereunder. Playoff Corp. v. Blackwell, 300 S.W.3d 451, 455 (Tex. App.—Fort Worth 2009, pet. denied) (citing T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992)). Stated conversely, if an alleged agreement is so indefinite as to make it impossible to fix the legal obligations and liabilities of the parties, it cannot constitute an enforceable contract. Id. (citing Restatement (Second) of Contracts § 33(2) (1981)). The very nature of an accord and satisfaction is that the obligee under an agreement agrees to accept less than owed under the original agreement in return for extinguishing the obligations under that agreement. See Lopez, 22 S.W.3d at 863. SOURCE: Houston Court of Appeals - 14-10-00081-CV - 6/7/11 Related legal terms: settlement agreement, release, Rule 11 agreement to compromise claims